Canada and Mexico Move to Retaliate on Trump Tariff Orders

 

Canada and Mexico Move to Retaliate on Trump Tariff Orders

Published Feb. 1, 2025

Updated Feb. 2, 2025, 2:10 a.m. ET

https://www.nytimes.com/live/2025/02/01/us/trump-tariffs-news

 

Where Things Stand

Trump tariffs: President Trump on Saturday followed through with his threat to impose stiff tariffs on Mexico, Canada and China, setting the stage for a destabilizing trade war with the United States’ largest commercial partners. The tariffs were set to begin on Tuesday. Read more ›

 

Tariff retaliation: Mexico and Canada immediately vowed to impose tariffs of their own. The Canadian prime minister, Justin Trudeau, announced retaliatory tariffs starting with 25 percent tariffs on approximately $20 billion worth of U.S. goods on Tuesday, with $85 billion more to follow within three weeks.

 

China’s response: Its commerce ministry said China would file a case against the United States at the World Trade Organization and also vowed unspecified “corresponding countermeasures to firmly safeguard its rights and interests.” And its foreign ministry defended its record on fentanyl, saying that China had led the world in 2019 when it imposed stringent regulations on fentanyl-related substances.

 

Matina Stevis-Gridneff Mike Ives Emiliano Rodríguez Mega Ana Swanson and Alan Rappeport

 

Here’s what to know.

President Trump on Saturday moved to impose stiff tariffs on Mexico and Canada, whose leaders swiftly responded with their own levies and accused Mr. Trump of starting a trade war that would debilitate all three economies.

 

Mr. Trump hit Canada and Mexico with tariffs of 25 percent on all goods, with a partial carve out for Canadian energy and oil exports. He said he was imposing them until the flow of migrants and illegal fentanyl into the United States was alleviated, but his administration did little to explain what further steps were needed to remove the tariffs.

 

The tariffs announced Saturday also placed a 10 percent tariff on goods from China, another major U.S. trading partner. China’s Ministry of Commerce issued a statement saying that China will file a legal case against the United States at the World Trade Organization.

 

The ministry also said China “will take corresponding countermeasures to firmly safeguard its rights and interests.” But it did not mention tariffs or otherwise specify other steps. China has strong incentives to avoid a trade war, but also risks looking weak domestically if it does not retaliate.

 

The responses from Mexico and Canada to the levies — set to go into effect on Tuesday — were swift.

 

Prime Minister Justin Trudeau of Canada later said that Canada planned to initially retaliate with 25 percent tariffs on approximately $20 billion worth of U.S. goods on Tuesday, and $85 billion more within three weeks.

 

Mr. Trudeau made a direct, emotional plea to Americans that evoked the countries’ close ties and shared history, including Canadian soldiers who fought and died beside American counterparts. He also said that the best way to usher in a golden age for the United States was to partner with Canada, and that Canada has critical minerals and other ingredients that American industry needs to succeed.

 

“We don’t want to be here,” he said of the tariffs. “We didn’t ask for this.”

 

President Claudia Sheinbaum of Mexico responded with a statement on social media that pushed back on Mr. Trump’s criticism. She described U.S. suggestions that her government collaborates with drug traffickers as “slander.” She also called on the U.S. to curb its domestic demand for drugs, and proposed more bilateral collaboration on the issue.

 

Ms. Sheinbaum added that Mexico would implement “tariff and non-tariff measures in defense of Mexico’s interests.” But she did not elaborate, and the potential scope of Mexico’s retaliation was not immediately clear.

 

Here’s what else to know:

 

Major partners: Products from Mexico, China and Canada accounted for more than 40 percent of all goods that come into the United States. The three countries provide cars, medicine, shoes, timber, electronics, steel and many other products to American consumers. Mr. Trump and other White House officials have deflected criticism that the tariffs will add to inflation.

 

Canada’s plans: Before Mr. Trudeau’s prime-time address, Canada had indicated that it would tax Florida orange juice, Tennessee whiskey and Kentucky peanut butter — products from states with Republican senators. Mr. Trudeau said on Saturday night that Canada’s tariff list would also include products like beer, wine, vegetables, perfume, clothing, shoes, household appliances, furniture and sports equipment, and materials like lumber and plastics.

 

Oil and gas impacts: The 10 percent tariffs that Mr. Trump said the United States would impose on oil imported from Canada are not as steep as he had indicated they would be. But they could cause prices at the pump to rise modestly in the U.S., particularly in the Midwest, where refineries turn a lot of Canadian oil into gasoline and diesel.